GM Shuts Down South Korean Production

gm shuts down south korean production

This is a big one. GM’s world-car ambitions over the last decade or so have been based on its former Daewoo plants in South Korea, which turned out 2m global-market econoboxes last year alone. Now the Financial Times reports that all five GM-DAT plants will be temporarily shut down in December, putting one of GM’s best-performing units on ice. Unfortunately for GM, this is not simply another symptom of its cash incineration and tightened credit. According to company officials, the shutdown stems from “slowing demand and GM’s need to manage production and rising inventories.” “The economic crisis is truly global,” Jay Cooney, GM Daewoo’s vice-president, said. “What we’re beginning to see here in Asia is no different from what is going on in Europe and what has already happened in the US.” Slowing markets across the Asia Pacific Rim mean the five GM-DAT factories will go from operating at 110 percent capacity to a full stop, as GM tries to sell off its remaining inventories of Korean-made Chevrolet, GM, Daewoo, Holden, Buick and Pontiac models. GM also announced that its entire Asian arm lost $6m in Q3 of this year, the first such loss in years for the usually profitable division. This also means that Asia will now be waiting (just like us) to even have a shot at buying a new Cruze which hit the streets as the Daewoo Lacetti last month.

Join the conversation
4 of 7 comments
  • Bill h. Bill h. on Nov 12, 2008

    The last visit I made to the Olde Country was some years ago, but even then it was apparent that South Koreans had the most modern models of cellphones and other electronics, which only months later were "handed down" to those silly behind-the-times Americans who didn't even have broadband everywhere. And some of the most innovative features of those devices never made it across the Pacific, because the US infrastructure couldn't handle them. The Daewoo cars I saw there were quite different from what they had been selling to GM for export to the US, and many of course were LNG powered. The US car market may have volume, but fostering innovation by itself has not always been its hallmark.

  • Snabster Snabster on Nov 12, 2008

    Wow, I'd love an used Korean phone. Especially since it uses a different radio than the rest of the world. I need more brickends. Korea may have some nice cars, but Daweoo ain't one of them. But they did what people have asked GM to do: make cheap small cars. And people bought them.. This is probably more about the China market than anything else.

  • Bill h. Bill h. on Nov 12, 2008

    Ahem: I meant it was the types/models/features of cellphones that were handed down, not the phones themselves. One usually assumes that phone frequencies get adjusted for different markets, but then I guess I have to be more explicit for some folks here.

  • Fallout11 Fallout11 on Nov 12, 2008

    Considering the previous Suzuki Forenza (Daewoo) was/is head and shoulders above the current GM Lobalt (having owned both), this is bad, bad news for GM.